Posts tagged 'Germany'

No delay from Karlsruhe

From Reuters earlier on Tuesday:

Germany’s constitutional court said on Tuesday it would not postpone its long-awaited ruling on the legality of the euro zone’s bailout fund despite a new legal challenge by a eurosceptic lawmaker. Read more

German domino theory and book-cooking

There are two fairly important bits to this story in Der Spiegel.

One, that Merkel wants to avoid a Grexit for the time being and two, that the upcoming Troika report might be massaged to make that a reality. Read more

Eurozone PMIs: from still bad to worse

Let’s start on a positive note on the volley of Markit PMI released Monday.

Spain’s PMI rose during August to 44, versus 42.3 in July… Read more


Here’s a call from Sober Look on Tuesday — Germany’s growth might be on the cusp of going negative:

So much for the hopes and dreams of German decoupling from the Eurozone’s economic troubles. How things have changed in just six months… Germany’s growth trajectory is now converging with the rest of the euro area’s weakened economic conditions. Read more

Germany on Greece: a dramatis personae

Ahead of  Greek PM Antonis Samaras’ meeting with Angela Merkel on Friday we thought a look at Germany’s cast and position might be worthwhile… especially since the Greek leader is set to pitch for a two-year extension to meet fiscal targets set out in the loan agreement at that meeting.

As the FT notesRead more

Spreads and that damn seniority

Here’s an interesting exercise in eurozone sovereign credit, courtesy of Francesco Garzarelli of Goldman — click charts to enlarge:

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Ironische Bundesbank lessons

A grainy picture of some central bankers. A warning in German that “it is immensely amateurish to renounce this mechanism.”

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It’s Monday, it’s Moody’s, it’s negative on eurozone AAAs

Finland is a rare stable Aaa-rated credit in the eurozone, according to the ratings agency, which placed Germany, the Netherlands and Luxembourg on a negative outlook.

Possible contingent liabilities from rescuing Spain and/or Italy loomed large. Read more

Some Monday morning yield curves

That’s Germany at the bottom, Italy in the middle and Spain going basically flat from 3-year out (click to enlarge):


That’s one unhappy Minister-President of Bavaria venting on Tuesday. Read more

It’s hotter in Karlsruhe than you think

Admittedly the words Karlsruhe and German and constitutional court lack any sex factor, but the relative lack of attention the case is getting seems a bit odd to us given what’s at stake. We’d expect the markets to be just a bit more het up about it.

So would Martin Lueck, an economist at UBS, who argues in his latest note that too many investors don’t understand the situation and are just assuming that the court will yield to the markets’/politicians’ pressure and let ratification of the ESM and fiscal compact pass: Read more

Richard Koo’s semi-successful attempt to persuade Germans about balance sheet recession

Nomura’s Richard Koo has written a fascinating account of his meeting with “a number of influential politicians, academics, and senior government officials” in Berlin last week.

First, he heard that some Germans don’t think Greece should have ever been admitted to the eurozone. One of them even said Greece was not really a modern nation-state, Koo writes. Another politician/academic/official was more positive, saying both Greece and Ireland had become more competitive of late, as wages and prices had fallen. Read more

Cajas or Landesbanken?

Click through the pic to the full IMF report on country x to find out. (p. 17)

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Pricing the German costs of a euro break-up

Calculating the benefit to Germany from eurozone membership has been attempted numerous times, and proven rather hard to pin down. But what about the opposite? The costs to the country of a euro break-up? Given the importance of Germany’s support to the survival of the euro project, this is a big question, with a tonne of political baggage attached.

The German ministry of finance has done just such an analysis, according to Der Spiegel, and found that the costs of such a break-up and the re-introduction of the D-Mark would lead to an up to 10 per cent fall in GDP in the first year. Unemployment would surge to its record high of over 5m. Read more

“They haven’t got a handle on what is happening in the Länder.”

We take our headline from Sharon Bowles MEP.

The Member of the European Parliament was talking to Public Service Europe about this ominous move in transparent sovereign accounting: Read more

“So let’s decide this whole bailout thing on penalties, ok?”

It’s an understatement to say that the last couple of years haven’t been great for Greco-Germanic relations.

On Friday night, however, the eurozone’s strongest and weakest nation get to fight it out – on the football pitch. They are through to the quarter-finals of the Euro2012 championships. With everything that’s happened, it’s hard to ignore the political overtones to the match. Read more

Zew Germans are suffering

Germany’s Zew index has suffered its worst decline in 13 years and while it has never been a perfect indicator this level of decline doesn’t bode well for Germany’s future prospects. This is from the Zew Center for Economic Research (with our emphasis):

The ZEW Indicator of Economic Sentiment for Germany has decreased by 27.7 points to a level of minus 16.9 points in June 2012. This is the indicator’s strongest decline since October 1998. The worsening of the situation in the Spanish banking sector and the insecurity about the outcome of the Greek general election, which had been lasting for most of the survey period, are likely to have contributed to the sharp decline of the indicator. Read more

Merkel’s options: Pay, inflate, or else…

How Charles Dumas of Lombard Street Research gets from this poor performance in Dutch retail sales recently…

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Spain, Bankia and the credibility problem

Spain’s government has been left looking increasingly desperate/reckless/ineffective by its plans to rescue Bankia, as today’s FT describes:

Mr Rajoy and his government are facing growing domestic criticism over repeated errors of strategy and communication, which that have given an impression that Madrid has run out of ideas on how to handle its financial and economic crises. Read more

Richard Koo’s prescription for Greece (and Germany)

Nomura’s Richard Koo is kinda with Christine Lagarde when it comes to the Greek tax problem.

But eurozone bonds (aka eurobonds) are not the solution, he says. Firstly, Greece needs to address its mutual distrust problem with Germany, and persuade the Germans that it will get serious about this tax collection thing: Read more

German slackers vs toiling Greeks…

In the (relative) absence of news, we should share this tweet from @presseurop

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Totting up Germany’s eurozone exposure

Any discussion that involves a discussion of the Euro-system’s TARGET2 mechanism carries a big fat tail-risk that this correspondent’s head will explode. But we’ll run that risk in the interests of readers…

Christian Schwarz and Matthias Klein at Credit Suisse have produced a tome entitled, rhetorically: Will Germany Continue to Pay? Read more

I find your lack of faith disturbing

The ‘Greece’ section of the Bundesbank’s latest report on the German economy must be read to be believed (emphasis ours):

Current developments in Greece are extremely worrying. Greece is threatening not to implement the reform and consolidation measures that were agreed in return for the large-scale aid programmes. Read more

Tourist-trapped, in the Greek bailout

Or the Greek-German relationship, told through tourism.

I ask Germans to choose Greece for their summer holidays. Read more

Oh Schatz! No coupon

This. Is. Marktverwerfung:

That’s a 0.00 per cent coupon on €5bn of two-year German debt to be sold this Wednesday. Read more

A flight to quality, charted

That’s German bund futures, on Wednesday. Fresh record.

A German GDP beat on a divergent morning [updated]

The German economy grew five times faster than expected in the first quarter of the year, jumping 0.5 per cent. Admittedly expectations were for only 0.1 per cent growth but still, tis cheering news on a wet London morning – particularly considering the 0.2 per cent hit German GDP took in the last quarter of 2011.

The year on year increase was 1.7 per cent, beating expectations of a 0.8 per cent jump, and the German statistics office said growth was supported by an increase in net trade as exports to outside the eurozone gained. Read more

A Dutch auction and an old rivalry

Netherlands got its (very small) sale away in undramatic fashion following the collapse of its government. From Reuters:

The Netherlands sold 1 billion euros of 3.75 per cent notes maturing in 2014 at an average yield on 0.523 per cent and 995 million euros of 4 per cent bonds maturing in 2037 at an average yield on 2.782 per cent. Read more

Oops, German austerity fail

There’s an interesting article in Der Spiegel on Tuesday about how Germany has failed to reach its own austerity goals in 2011.

Naturally, this news comes across as a tad hypocritical given Angela Merkel’s own track-record lecturing to the periphery about the importance of austerity. Read more

Bundestag backs Greece bailout

German MPs have given Chancellor Angela Merkel a sweeping majority in favour of the second Greek bailout package, the FT reports. Opposition Social Democrats and Greens joined Ms Merkel’s Christian Democrats and her Free Democrat junior partners to pass the package by 84 per cent of votes cast, despite Merkel herself remarking that she had sympathy for those who saw Greece as a “bottomless pit”. Merkel’s own coalition votes were enough to deliver a majority, an important symbol amid rising divisions within Ms Merkel’s own cabinet about the merits of a Greek default.